National Statistical

In recent years the Office for National Statistics (ONS) has been working hard to transform and improve the way it tracks the movement of consumer prices. At the forefront of this work is our development of dynamic consumer price statistics using digital data sources. Mike Hardie looks at how this groundbreaking work is improving our understanding of inflation in the UK economy.  

Our headline inflation metrics measure how the prices of goods and services bought in the country change over a year. To produce these statistics, we construct a large virtual ‘shopping basket’ with around 750 frequently purchased goods and services, updated annually to reflect changing spending patterns.  

Traditionally we’ve monitored how these prices are changing month-on-month by going into stores with handheld devices or checking websites. But this is all changing for certain key items as we harness digital sources with the potential to vastly increase the volume of data on which our inflation estimates are based.   

Tracking prices on rail and road  

In 2023 we began to use a new source of data for train fares from the Rail Delivery Group, which increased our number of price points from a single growth rate to around 40 million prices per month, covering all consumer rail fares transactions in Great Britain. In addition, this year we began to use Auto Trader data to measure change in the price of second-hand cars, which increased the number of price points available to us from 105 to 300,000 per month.  

Supermarket scanners 

In March 2025, we will introduce our biggest update so far for 50% of the grocery market. Instead of sending our price collectors into shops to collect 25,000 prices per month, we’ll replace this with approximately 300 million price points derived from sales of over a billion units of products per month, collected directly from supermarket scanners at the checkouts. It is important to emphasise that while this new system will tell us what shops are selling, it won’t tell us anything that identifies individual consumers or their shopping habits.  

We explain what our planned changes for collecting prices will mean for consumer price statistics in our video https://www.youtube.com/watch?v=cUmAmv7LUDQ

More detailed prices, faster  

So why is it important to use these new and bigger data sources?  

There are two main benefits of using groceries scanner data.   

The first is coverage. We currently collect a sample of products in each store as it’s not practical or cost effective to manually collect every price for every single product in a category. For example, to measure the inflation of bread, we collect a handful of varieties to represent bread as a whole. However, when we move to using supermarket scanner data in March 2025, we will be using prices from all bread products, significantly expanding the amount of price information being used.  

We will also have access to prices from across the entire month, rather than on a specific day, which will allow us to capture how prices are evolving during the month. With the existing collection method, if a special offer is only available for a set period and this is not within the current collection window then it would not be captured. This new and much more comprehensive data will enable us to produce analysis at a much more detailed level about exactly how and where prices are changing. 

The second benefit is that we will also know the quantities being sold. So if, for example, the price of one type of apple goes up and people shift to buying a cheaper variety we’ll be able to reflect amounts spent on each product in our published figures. This new information at the detailed product level, which is updated every month, will allow us to better capture changing consumer behaviour.  

Inflation statistics for the digital age 

This powerful data source requires new methods for us to be able to process them. The ONS has published articles looking at exactly how to harness these new data in a way that best utilises that more detailed price and quantity information. 

The use of these new data sources is a big step forward for the ONS and will allow a significant improvement in the quality of our consumer price statistics.